Market power meets political muscle: Navigating the tech merger control landscape

In 2026, tech M&A is being increasingly shaped by geopolitics, with authorities factoring greater national security, economic resilience, and tech sovereignty considerations into their merger control reviews. Yet amidst this complexity, a more nuanced picture is emerging: regulators are balancing scrutiny with growth imperatives, creating opportunities to get complex tech deals over the line with careful planning.

Political pressures making seismic shifts

2025 has seen an increased politicisation of merger control, resulting in diverging approaches to cross-border deals by global regulators.

Focus on innovation and growth

In the UK, political pressures have led the Competition and Markets Authority (CMA) to retreat from aggressive enforcement of cross-border deals, instead favouring more targeted interventions focused on cases with a UK specific impact. As the UK government places innovation and growth top of the agenda, the CMA has responded with its '4Ps' initiative (promising to enhance pace, predictability, proportionality and process) and lower levels of intervention – with Phase 2 intervention rates down to 30%^[1] from 54%^[2] and more willingness to consider innovative remedy structures (e.g. Vodafone/Three).

Similarly, in the US, the current administration has also seen a renewed focus on growth: for unproblematic deals, seeking to avoid red tape altogether; and for complex deals, applying increased flexibility and targeted remedies to resolve concerns while preserving the innovation / investment upside of scale (e.g. Spirent/Keysight and Synopsys/Ansys). 

The importance of resilience and strategic autonomy

Authorities are also assessing whether to incorporate broader objectives including resilience, strategic autonomy and the green transition in merger control.

Following the Draghi Report on the future of European competitiveness, the European Commission (EC) is conducting an overhaul of its merger control guidelines so that merger control does not deprive EU companies of the scale needed to compete with Chinese and US rivals, takes into account the specificities of hi-tech sectors and supports the strengthening of Europe’s technological base. However, with the review still more than a year from its expected completion, there remains much speculation as to what the new guidelines will include and how they will be applied in practice. 

Comparatively, China’s political High-Quality Development and Digital China agendas, focussed on sustainable, innovation-driven growth and technological self-reliance, provide for a similar approach: permissive where it strengthens national capabilities, and restrictive where it risks instability or dependence. This is particularly evident in sectors such as semiconductors where the State Administration for Market Regulation (SAMR) has subjected foreign-to-foreign transactions to extended reviews and close coordination with industry regulators, with a focus on impacts on Chinese customers and industry. 

Similarly, in the US, deals are increasingly assessed through both a competition and strategic-resilience lens. This approach has opened doors to clearance on novel remedies. At the same time, non-traditional policy concerns around ESG and content moderation are surfacing in reviews.

Pockets of permissiveness

There are, however, some pockets of permissiveness across Asian jurisdictions, where politics is an obvious background theme driving consolidation and developing national champions. In Hong Kong SAR, a Chinese-SOE backed transaction in the telecommunications sector saw the regulator waive through a 4-to-3 merger with limited behavioural remedies. 

In Indonesia, there are strong signals that the government is actively encouraging the merger of two of ASEAN’s ‘super apps’, which would lead to significant concentration in ride-hailing and food delivery services.

Low blows: Authorities continue to review below threshold deals

The political sensitivities driving regulators’ approaches in the tech M&A space are likely to be a subject of much debate in 2026, particularly regarding below-threshold deals (involving tech companies with low turnover but high strategic values) and ‘killer acquisition’ theories of harm (where a dominant company buys a smaller, innovative competitor primarily to shut down its competing product or technology).

Following the Illumina/Grail case, where the EU Court of Justice found the EC’s approach to the review of below-threshold deals illegal, a number of Member States have introduced national powers to facilitate the EC’s review of below-threshold transactions. However, to date, the only tech sector referral has been Nvidia/Run:ai, which was cleared in Phase 1 (the legitimacy of the referral is nevertheless being challenged before the EU courts). There also remains a question mark over whether the EC may seek more comprehensive powers to review below-threshold transactions in the coming legislative cycle.

This trend appears to be global, with the current US administration scrutinizing deals in strategic sectors, such as AI, that fall below reportable thresholds (e.g. Google/CharacterAI), while China is also sharpening below threshold call-ins. The SAMR has already called in a number of below-threshold deals, the vast majority of which relate to the tech/semiconductor sectors (e.g. Qualcomm/Autotalks and Synopsys/Ansys). This creates uncertainty and can extend global deal timelines, which should be considered at the outset for deals involving sensitive technology.

Modernised merger rules for a digital age

We expect these political shifts to continue forging deeper change and modernisation of merger control frameworks into 2026.

The EC has taken the lead, linking its forthcoming revisions of the EU Merger Guidelines to the goals of the Draghi Report. These aim to foster resilience and offer greater predictability – for example by introducing innovation defences and protecting innovation – and also adopt a stricter approach to enforcement, especially where deals risk foreclosure or loss of contestability, as might be the case for digital markets. 

In parallel, the UK’s CMA has reinforced its commitment to proportionate, evidence driven reviews, with new guidance on efficiencies assessments and procedural flexibility, together with procedural streamlining, including proposals to remove independent Phase-2 panel boards. The CMA’s ongoing Remedies Guidance Review, complements this shift by signalling significantly more openness to innovative remedy structures.

Meanwhile, China’s SAMR has been developing horizontal and non-horizontal merger guidelines which provide a new and clearer analytical framework. Consistent with SAMR’s decisional practice, the guidelines reflect lower standards to find substantive issues compared to overseas counterparts, signalling the level of scrutiny (and the potential need for remedies) that can be expected in strategic sectors, such as tech. 

A pivotal year for tech M&A

The current regulatory landscape suggests that 2026 will mark a pivotal year for tech M&A, with heightened scrutiny driven by geopolitical tensions, particularly around data sovereignty, critical infrastructure, and competition with China and the US for technological leadership. Amidst this complexity, authorities are striving to balance scrutiny with growth, offering dealmakers new opportunities for successful outcomes, if they navigate the shifting landscape adeptly. 

Successful transactions will require careful structuring, early engagement with authorities (across multiple jurisdictions), and a willingness to adopt innovative remedies. Ultimately, those deals attuned to the new themes of economic resilience, national interest, and strategic engagement will be best placed to unlock value in a competitive and rapidly evolving digital marketplace.